Dental Tribune UK Edition, October 4-10, 2010, No.24 Vol.4

October 4-10, 201014 Business Management Tribune United Kingdom Edition DENTSPLY ACADEMY WEBINAR PROGRAMME Book the best seat. Your own. Visit www.dentalwebinars.co.uk to find out more and to book your place. The DENTSPLY Academy Webinars are the convenient and easy way for you to stay ahead and learn about the latest developments in dentistry. You can even interact ‘live’ with the speakers during the lectures. Plus you get to do it all from the comfort of your own home or practice, you simply need a computer with internet access. There are only 100 places available on each of our online seminars. So hurry and book your place on these popular events. WEBINAR PROGRAMMES Endodontics Dr Carol Tait Key concepts to aid competent cleaning and shaping of the root canal system 19:30, 5th October 2010 Obturation of the cleaned and shaped root canal system 19:30, 2nd November 2010 Periodontics Sarah Murray and Baldeesh Chana Root Surface Debridement 19:30, 27th September 2010 19:30, 8th November 2010 SDR Dr Trevor Bigg Smart Dentine Replacement 19:30, 26 October 2010 19:30, 10 November 2010 When the practice is trans- ferred to the newly formed company, it can often borrow to pay for the goodwill, which can amount to 100 per cent of the annual turnover of the practice. The interest on this loan quali- fies for tax relief, and the capi- tal sum borrowed by the limited company can be used by the dentist to reduce non-tax de- ductible payments, for example on his/her home mortgage. In some cases, the home mortgage can be paid off in its entirety, de- pending on the goodwill value. Even if the company does not need to borrow to complete the purchase of the practice, it is possible for the dentist as both shareholder and company di- rector (employee) to draw from the company a combination of salary, dividends, and loan re- payment, to reduce his/her per- sonal tax liability to zero, for a number of years after incorpo- ration. Corporation Tax on the practice’s (now the company), profits is of course still paid, currently at a rate of 21 per cent on profits up to £300,000. A family business Legislationtocurb“incomesplit- ting” has been deferred for now. However, other family mem- bers, often a spouse employed to manage appointments or other aspects of administration, as- sist many dentists acting as sole traders in the running of their businesses. If these family mem- bers also become shareholders in the new company, advantage can be taken of other allowable tax mechanisms to further re- duce the overall tax liability. Offshore structures For higher earners not dom- iciled in the UK for tax purposes, there are more so- phisticated tax-planning tech- niques that make use of offshore structures. If you fall into this category, (and your domicile in this context is not necessar- ily the country in which you live or hold a passport from!), you need to take specialist advice to optimise your tax position. It’s evident that all dentist sole traders and dental partner- ships, whether or not they are currently considering incor- poration, would benefit from a review of their status which compares their present position with that after the formation of a limited company. There is, quite literally, nothing to lose. At the same time, incorpora- tion is not necessarily appropri- ate for every practice. The ulti- mate decision, after considering specialist, professional advice, must take into account the in- dividual dentist’s present busi- ness circumstances, personal position and preferences and also, where relevant, his or her future plans. DT page 13DTß About the author Michael Lansdell was brought up in South Africa, receiving his hon- ours degree there in 1991. He com- pleted his training with international accounting firm Deloitte in 1994, and went on to be- come a founding partner at Lansdell & Rose Chartered Accountants (SA) a year later. Based in Kensington, London, Lansdell & Rose deal only on a long-term retained ba- sis, exclusively with owner-managed clients, generally dentists and doctors, and specialising in the incorporation of dental practices. As a client-focused team, they look for sustainable long- term solutions for their clients that maximise profits, minimise tax and build wealth. For more information, visit www.lansdellrose.co.uk or call 020 7376 9333. ‘Often a spouse em- ployed to manage appointments or other aspects of ad- ministration, assist many dentists act- ing as sole traders in the running of their businesses.’ ‘If these family members also be- come shareholders in the new compa- ny, advantage can be taken of other allowable tax mech- anisms to further reduce the overall tax liability.’